It’s 2019, and we live in the most convenient time known to man. Hungry? Press a button and your favorite food arrives at your door in less than 30 minutes. Need a ride? A push of a button away. Want to watch your favorite show? Just a press of a button and in no time you are in the middle of your binge session. Want to rent office space? One button away; gone are the days of going through the hassle of communicating with several middlemen and negotiating.
This wave of “convenience” has been brought about by internet startup companies like DoorDash, Uber, Netflix and WeWork amongst numerous others. Now, while one is compelled to acknowledge the genius in the “ideas” of these startups, I am not necessarily one of them.
Don’t get me wrong, I applaud the founders for building their way from the ground up and securing multi-billion dollar valuations for their companies; they are quite literally the rockstars of my world! But I’m not necessarily sold on the fact that just their “ideas” brought them thus far. I believe it was a combination of a lot of things.
“All your ideas may be solid or even good… But you have to Actually EXECUTE on them for them to matter.” -Gary Vaynerchuk
Now, let’s all admit we have had that one (if not more) startup idea that can be worth billions(at least in our head), right? Having read numerous books by investors and founders, I have come to look at startups quite differently than an average layman. For me, startups are a scalable and sustainable solution to real-life problems that can be made profitable with the right business model (yes, that is really my definition).
If one really starts to analyze the journey of any successful startup you would find they are essentially just solving a problem. Garrett Camp was thrown out of his cab in the middle of the night for no particular reason whatsoever; he later went on to co-found Uber. Brian Chesky and Joe Gebbia didn’t have money to pay rent, so they invited strangers attending an art conference in their city to stay at their place; they are the founders of Airbnb.
Necessity is the mother of invention, after all!
Any startup’s chances of being a hit rely on a handful of factors apart from the problem it’s trying to solve.
Execution is the holy grail for startups of all sizes. And well, I am no startup founder (not yet anyway!) but I can identify a bad business strategy when I see one, just like anyone of you can, it’s not rocket science. But then why do many startups and investors fail to see it? They don’t. All they want is growth, especially when they’re young. And now, with the influx of venture fund into the startup scene all over the world, companies don’t really care about profits, at least not in the short term anyway, they convince VCs that they’ll be profitable once they scale to more users and attract investments, securing high valuations on the way.
Bad execution is enough for any startup to bite the dust. Have you heard of Shyp? I guess not, well, Shyp was founded to make shipping items globally as easy as “two taps on a smartphone.” Only a few months after launch, Shyp received coverage from the New York Times and heavy investor interest. It was clear the pain points they were tackling resonated with a large audience. But as consumer growth slowed, Shyp was unable to keep up with its own growth. Rather than re-adjusting strategy from consumer customer acquisition, Shyp trudged onwards. Early mistakes hindered the company’s potential for a successful future, and the “growth at all costs” mentality eventually led to Shyp’s demise.
This is a classic case of a great idea but terrible execution.
Timing is quite often the most underrated aspect of a typical startup’s concern, and which most startups just take for granted. The right timing for a startup is pivotal to increase its chances of playing in the big league. “Is the market ready for a product like this?” or; “Will customers completely understand the value of the product?” are critical questions that need to be addressed before rolling out the product or service.
There are several examples of products or companies being too ahead of its time, which learned the lesson of bad timing, the hard way. Take Theranos’ case, its charismatic founder Elizabeth Holmes envisioned a future in which one wouldn’t have to physically visit a doctor to do basic tests requiring just minute amounts of blood; this is so far ahead of its time that the product couldn’t be engineered in the first place, with many experts calling it “science fiction”. After running the company for 10 years, Holmes is facing potential jail time with fraudulent charges being pressed against her.
Or even in the case of Webvan, which promised to deliver groceries to homes in under two hours, had to take a hit as a result of its bad timing. A concept that seems completely normal in today’s day and age was something that customers just weren’t ready for in the 1990s. Grocery shopping was a full family experience and customers just didn’t adapt to the basic premise of Webvan. Even after raising an amount north of $300 million, Webvan had to shut down just two years into rolling out its services.
Thus, timing is absolutely vital for any startup’s success.
The importance of having a solid team working towards a singular, shared mission can never be underestimated. Any company is only as good as its employees, so it is crucial for any organization to have a strong team, to have any shot at success.
Only one company comes to mind upon the mention of a solid team, PayPal. PayPal was a first of its kind online payments system which made money transfer as easy as a click of a button. When PayPal was brought by eBay, its founders and employees went into different directions, disrupting numerous industries. PayPal’s original team have since founded companies like Tesla( Elon Musk), Palantir(Peter Thiel), YouTube, Yelp, LinkedIn and Yammer! Now that’s what you call a strong team!
An idea can only take a startup so far. A combination of all the above-mentioned aspects are vital, and of course a sprinkle of luck!